'Arrogance' Blamed In Target Canada Flop Set To Cost 17,600 Jobs

On Thursday, Target's new CEO Brian Cornell announced the superstore chain would exit the Canadian market immediately, having already filed for a court approval to begin the liquidation process.

The move follows a $211 million decline in earnings before interest, taxes, depreciation and amortization in the third quarter of 2014 for the division.

For Canadian retail experts, the failure of Target Canada has much to do with the store chain's underestimation of the Canadian shopper.

"Canadians are sophisticated consumers," said Farla Efros, Toronto-based COO of Hilco Retail Consulting. "They love Target in the U.S. They would travel to Buffalo and come back with Target shopping bags. Had the company given them what they were used to, they would have had more success."

Instead of that Target experience they expected, Efros says Canadian shoppers were treated to higher prices, less selection in categories like children's clothes and housewares, and often empty shelves due to unusually bad supply chain teething pains.

"From the minute they opened the doors they were disappointing the Canadian consumer," she said.

Efros added that Target Canada faced a huge amount of competition in a country with a population less than that of California. The newbie on the block was up against Sears Canada, Walmart Canada, Canadian Tire, Costco, Loblaw and more.

"It's one thing to open in China, which is growing like gangbusters," she said. "We are not."

Joe Jackman, CEO of Toronto branding agency Jackman Reinvents, described an "expectation gap" created by Target, with all its pre-launch fanfare and its lightning-fast roll-out of 133 stores in two years.

"There's a lot of cross-border shopping," said Jackman, who boasts a client roster including Walgreens and Freshco.

"Target wasn't able to bring the brands Canadians expected. What arrived in Canada was not Target U.S. They didn't pay any attention to the Canadian consumer. You could call it arrogance."

Jackman added that Target Canada's stores -- many of them former outposts of the Canadian chain Zellers, bought out by Target in 2011 -- were in second-rate locations.

"This was yesterday's real estate," he said. "It may have been thriving decades ago but it's not the place to be anymore."

Target's 133 stores will remain open in Canada during the wind-down process. In an effort to compensate the approximately 17,600 workers who'll soon be without jobs, Target said it has applied for court approval to make a $59 million (70 million Canadian dollar) contribution into an employee trust that would ensure nearly all employees receive 16 weeks of compensation.

I'm a staff writer at Forbes, where I write about women entrepreneurs, workplace equality, and diversity in Silicon Valley and the tech world. Before taking on this beat, I spent three years covering retail and e-commerce, and the three before that chasing the super-rich for...